Accounting software

Question 1

What is accounting software used in book-keeping to do? 3

Answer 1

Produce invoices and credit notes
Maintain books of prime entry
Produce the trial balance from books of accounts

Question 2

What is accounting software used in financial accounting to do? 2

Answer 2

Produce the income statement and sofp.

Produce the statement of cash flow and statement of changes in equity for LLC.

Question 3

What is accounting software used in management accounting to do? 3

Answer 3

Produce budgeted financial statements
Produce cash budgets and other budgets
Compare budgeted figures to actual figures and calculate variances

Question 4

What are the advantages of computerised accounting systems? 5

Answer 4

Bookkeeping much faster than doing manually
Balances on accounts always up-to-date
Quickly available
No mathematical errors
Increased privacy if bookkeeper does not need to be hired

Question 5

Disadvantages of computerised accounting systems? 6

Answer 5

Cost of buying and installing software
Figures not available if crashes
Danger of hacking
Time to train staff to use software
Staff resistance to change (kotter)
Health and safety issues of being on PC too much

Question 6

Advantages of single entry systems 3

Answer 6

Easier than double entry
Quicker
Cheaper

Question 7

Disadvantages of single entry systems 3

Answer 7

Greater likelihood of mistakes being made and not noticed
Take longer to produce end-of-year statements
Higher accountancy fees

Question 8

Advantages of double entry system 3

Answer 8

Less likelihood of mistakes being made
Quicker to produce end-of-year statements
Lower accountancy fees to produce end of year statements

Question 9

Disadvantages of double entry systems 3

Answer 9

Harder than single entry
Slower than single entry
Employing bookkeeper to complete will increase costs